12-month performance: +37% Insider activity: Bullish Insider buying pattern: Large purchase from CEO Recent news: Announced positive data
Top level insiders such as CEOs have far more information on their companies than the rest of us. If they’re buying stock, it’s worth taking note. Put simply, they are the smart money.
One stock that has seen a large CEO purchase this month is Dicerna Pharmaceuticals (DRNA:US). Dicerna is a leader in RNA interference (RNAi) technology and creates medicines that can enhance the health of patients with rare diseases. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $1.4 billion.
Dicerna Pharmaceuticals: insider buying
Form 4 filings show that on 1 September, Dicerna’s CEO Douglas Fambrough – who co-founded the company in 2007 – purchased 10,000 DRNA shares at a price of $18.06 per share. The total cost of the purchase was $180,597. This increased the insider’s holding from 12,300 shares to 22,300 shares.
Source: 2iQ Research
This insider purchase is significant for a number of reasons. Firstly, Fambrough doesn’t buy stock often. His last purchase was back in November 2016 – nearly four years ago. Secondly, while this trade is not huge in nominal terms, it is large in relative terms. It has boosted the insider’s holding by 81%. Third, Fambrough has a high long-term trading IQ of 114. Finally, Fambrough has extensive industry experience. Prior to Dicerna, he specialized in financing innovative life science technology companies as a general partner with Oxford Bioscience Partners, a Boston-based venture capital firm. All of this suggests that the stock could be worth a closer look right now.
In August, Dicerna announced positive data from its Phase 1 proof-of-concept trial of RG6346, an investigational candidate for the treatment of chronic hepatitis B virus (HBV) infection in development in collaboration with Roche. It also announced positive data from its PHYOX3 open-label trial of nedosiran, an investigational candidate for the treatment of primary hyperoxaluria (PH).
“I am very excited by the results we are seeing across our portfolio, demonstrating the strength of our RNAi technology platform and clinical enterprise, which together form the strong foundation upon which we are building our business to evolve into a fully integrated, commercial-stage biopharmaceutical company,” said Fambrough.
On the back of this update, Citigroup raised its price target from $32 to $33 – around 70% higher than the current share price.
In light of these developments, we see the insider buying here as bullish. The large purchase suggests that Fambrough is confident about the future.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
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